Women Are Getting Bank Loans By Using Designer Bags as Collateral
Imagine using your beloved Chanel bag as a way to get some upfront cash in order to pay rent. Sound crazy? That’s exactly what some women in Hong Kong are doing.
It’s called a handbag-backed loan, and instead of asking for cars and homes, Hong Kong’s Yes Lady Finance Co. asks for borrowers’ designer bags as collateral.
According to the Wall Street Journal, the four-year-old company accepts bags on the spot (barring they pass an expert’s authenticity review) and offers up a loan within 30 minutes at 80 percent of the bag’s original value. The catch? The goods have to be by Gucci, Chanel, Hermès, Louis Vuitton, or—occasionally—Prada.
Maggie Wong, 30, told the Journal she uses the service when she needs quick cash to pay for things like daily expenses or her five-year-old son’s tuition. “I don’t want to go through all the complicated application procedures in the banks,” she said.
In the past year, Wong has put up three purses—Guccis and Vuittons—for a total of$1,290. She paid off the loans (at a four percent monthly interest) and has all the bags back in her possession.
What’s interesting is—as the Journal pointed out—the pawn industry primarily targets low-income residents, but Yes Lady caters to wealthy residents whose money may be tied up in stock or, clearly, high-end designer bags.
It sounds like a good idea to us: After all, a solid collection of designer handbags and other luxury goods can easily tally up to the same amount as, say, a car (one Yes Lady customer brought in between 40 and 50 Gucci bags at once, receiving a $38,000 loan!)